BERLIN -- German supplier Schaeffler said growth at its automotive division continues to outpace global car markets, but CEO Klaus Rosenfeld warned that the company would find it difficult to sustain strong margins in automotive operations given rising steel prices, high r&d costs and heightening competition.

Counting on new business opportunities from an expected rise in demand for electric cars, the increasing web-connectedness of traditional industry and digitization, Schaeffler aims to increase sales by as much as 6 percent per year by 2020, compared with 3.4 percent last year, the company says.

Separately, Schaeffler said sales at its industrial division likely returned to growth in the first quarter after three years of declines.

Sales in industrial operations, which accounted for nearly a quarter of Schaeffler's 13.4 billion euros ($14.60 billion) of group revenue in 2016, are beginning to stabilize, Rosenfeld said on Wednesday at Schaeffler's annual general meeting in Nuremberg.

Last year, the division reported a 7 percent margin before special effects, compared with 14 percent in automotive operations.

Schaeffler, which owns a 46-percent stake in rival Continental, is scheduled to publish first-quarter results on May 11.